Austria: Court wage ruling a big blow for airline

The European Court of Justice has ruled that Austrian Airlines was acting unlawfully when it imposed the collective agreement of a subsidiary on all its 2,300 flight personnel.

This is a major blow for the former national airline carrier which was sold to German carrier Lufthansa in 2008 and has struggled ever since to become profitable.

As part of cost-cutting measures, management presented a new collective agreement with less favourable employment and working conditions in 2012. After the trade union and works council representatives rejected the proposal, the company urged the Austrian Federal Economic Chamber (WKÖ) to cancel the two existing agreements in May of the same of year – one for its ‘old’ personnel and the other for employees of its former subsidiary Lauda Air.

At the same time the company transferred the flight personnel to its subsidiary Tyrolean Airways and began to impose the less favourable Tyrolean Airways agreement which, among other things, meant a 25% wage cut.

According to the European Court of Justice, the old agreements continue to apply until a new agreement has been reached. What exactly this means in terms of outstanding compensation for the respective workers remains to be decided by the Austrian High Court. The trade union has urged management to reopen negotiations about a new collective agreement.